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Investment Research Since 1978

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Investing in Your Food Supply

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You may want to start thinking and investing like a farmer. As a group, farmers’ average age continues to rise. And as their numbers decline in the coming years, the quality of our food is likely to follow suit, given the notion that more processing will pick up the slack. That’s why it’s so important to protect our heritage breeds—animals that were around when Thomas Jefferson walked the fields of Monticello. Protecting our heritage breeds may not be something you think about every day. But those who work at the SVF Foundation in Newport, Rhode Island, do. The SVF isn’t your ordinary farm. … [Read more...]

This One Thing Could Save Your Life and Your Portfolio

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You might think I’m crazy buying $175 sneakers. I’ve never spent that kind of money on sneakers before, and it’s at least double what I’ve normally spent in the past. So I’m calling my Newton sneakers an investment. I was introduced to Newton sneakers by my Pilates teacher and trainer, Jane Beezer, as we were discussing the book Born to Run by Christopher McDougall. It’s reshaping the sneaker industry. And as it turns out, less is more. Years of running injuries can be tied back to a sneaker industry that babied our feet with too much cushion, encouraging a heel-first strike point rather … [Read more...]

A Little Mistake That Can Cost Hundreds of Thousands of Dollars

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You being in the top 97th percentile in good looks and wealth might be good. But being in the top 97th percentile in the fees you pay your investment advisor is…not so good. PriceMetrix, a wealth-management software firm, has come out with a report showing that a significant variation in pricing exists between investment advisors. The firm has quite a database to pull from—15,000 advisor books, 2.3 million investors, 380 million transactions, 1 million fee-based accounts, and over $850 billion in investment assets. The study examined the pricing on balanced accounts for households with … [Read more...]

Outliving Your Money

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Just over thirty years ago, the 3-Month Treasury-bill yielded 16.3% in the secondary market. At the beginning of this month, as you can see in the chart above, it yielded only 0.01%. That’s 1 basis point, or a difference of 16.29%. It can’t possibly go below zero. Though the yield is already negative when accounting for inflation, as investors line up to pay to lend the government money. Investors are in a real predicament, especially those living on a fixed income. How many investors built their retirement savings plans using such low rates as inputs in their models? Not many to be sure. … [Read more...]

Sell in May and Go Away

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The following charts illustrate the irrefutable stock market power in the year before a presidential election. As you can see there is no other year quite like year three in the presidential election cycle in terms of consistent gains from stocks. The average return in year three is 16.9%, compared to 6.7%, -0.1%, and 5.9% in years 1,2,4 respectively. Year three also has the lowest standard deviation of the four. “In the first seven months of the third year since 1960, Year 3 has returned 2.5% per month for a total of 20% real (after inflation adjustment). In contrast, the … [Read more...]

Dividend Increases

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According to Standard & Poor’s, 2011 is setting up to be an excellent year for dividend increases. To date, at least 150 companies have increased their dividends. And that’s with less than half of the year gone by. That’s a solid pace, considering that 256 companies increased their dividends in all of 2010. But don’t be fooled by headlines promoting big increases. Even an impressive 20% increase like the one Cablevision announced on Wednesday can leave investors wanting more, since it still only yields 1.7%. On the flip side, National Bankshares Inc. increased its dividend by only … [Read more...]

Cheeseburger in Paradise

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Your financial freedom is at the mercy of a politicized Federal Reserve seemingly more interested in recapitalizing big Wall Street banks than helping you maintain your purchasing power. Near-zero interest rates and a declining dollar turn their lunch into a cheeseburger in paradise while you’re stuck brown-bagging it. The Fed’s dual mandate of full employment and price stability hasn’t exactly materialized, as unemployment logs in at about 9% (11% in Rhode Island), and searching for lower prices has become the great American pastime. Meanwhile, balanced economic growth, which is part of … [Read more...]

Dow in Dollars and Gold

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This week the Dow Jones Industrial Average surged to 12,700, about where it was three years ago. You’re back to even, right? Not really. Over the same period Gold has risen 68%. It’s true the Dow in dollar terms is about the same over the last three years but when comparing it to the Dow in terms of gold — or real purchasing power — it’s another story. Based on this chart it would appear the Fed is a little late in protecting your dollar, wouldn’t you say? … [Read more...]

Are These Investors Missing the Boat?

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You wouldn’t invest in a stock with a sky-high commission rate, would you? How about buying a stock that promises you won’t lose money—but with the caveat that you’ll be capped at a maximum 6% or 8% yearly gain even if the stock surges well beyond that? How about being penalized if you need to sell within 10 years, for example, because you realize what a mistake you made buying it in the first place? Such is life for most long-term, equity-indexed annuity holders. Good luck figuring this out on your own. Believe me, the salesman isn’t going to point it out in his sales material. It takes … [Read more...]

The Fed Is Killing the Dollar

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You can feel rich and poor at the same time. Take the college student living large on Mom and Dad’s tab. He may be enjoying his last semester of college but could also have a knot in the pit of his stomach; come next month, he graduates with no job. The same up-and-down feeling might apply to the purchasing power of your dollar today. For example, you can feel rich by being a vulture investor in Florida and buying a condo at a deeply discounted price. But then you’ll feel poor driving south when your snowbird daydreams are abruptly interrupted by the sticker shock of filling up the … [Read more...]